Frequent visitors, or even casual visitors to Starbucks locations in the Bay Area have recently been bombarded with a Starbucks promotion for their new reward program. Unlike their previous program (which is still available), this is a membership program similar to Costco’s annual membership. You have to pay $25 / year to start and you get to save 10% automatically on any purchases (with a few exclusions). One of the fringe benefits is you can get 2 hours of free Wifi daily at any SBUX with a Wifi access point.

Here is why I think this is a bum deal for the consumer. Not counting the other benefits, which are designed to suck you into this impulse buy, to recoup your $25 purchase, you would have to buy $250 worth of stuff every year. Assuming you go for the large specialty drink at ~$4.50 each, that’s about 56 drinks per year. That is a bit over 1 drink / week. This is just to break even. You’re much better off getting a 20% discount by buying $100 worth of gift cards at Costco for $80.